Broker Check

Is COVID A Pollutant?

December 20, 2021

Since the COVID-19 pandemic began, there has been a war between policyholders seeking coverage and insurers using virus exclusions to deny it. Insurers have won many of the court battles, and they may be opening another "front" by way of the pollution exclusion.

A recent Cyber form has an expanded definition of pollution that includes microorganisms, mold, mildew, fungus, spores, bacteria, disease and virus. The same terms appear in a definition of "biological contamination". The pollution exclusion in this form has been extended to the presence of pollutants, not merely their discharge or release.

The pollution exclusion has been misused in the past to apply to claims that should normally be covered by Property or Liability insurance. While insurers' desire not to cover a pandemic is understandable, in this form it could be used to deny claims by individuals who have a legitimate expectation of coverage.

It remains to be seen how widely insurers will broaden existing exclusions or introduce new ones in the wake of COVID. Every renewal policy will be to be checked, and new wording cannot be accepted without challenge.